In this paper we present the thermal and mechanical analysis of high power light emitting diodes with ceramic packages. Transient thermal measurements and thermomechanical simulations were performed to study the thermal and mechanical characteristics of ceramic packages. Thermal resistances from the junction to the ambient were decreased from 76.1 °C/W to 45.3 °C/W by replacing the plastic mould to the ceramic mould for LED packages. Higher level of thermomechanical stress in the chip was found for LEDs with ceramic packages despite of less mismatching coefficients of thermal expansion comparing with plastic packages. The results suggest that the thermal performance of LEDs can be improved by using ceramic packages, but the mounting process of the high power LEDs with ceramic packages is critically important and should be in charge of delaminating interface layers in the packages.